The use of bone conducted signals for children with chronic otitis media may be considered when earphones or hearing aid receivers are contraindicated because of discharging or painful ears. The use of FM hearing aids in the classroom coupled to a bone conduction (BC) transducer has beneficial application even when considering improved binaural function. This study investigated speech discrimination in diotic and dichotic noise. Confusion matrices were obtained for consonant-vowel (CV) exemplars presented to normal hearing subjects through BC in both correlated and uncorrelated noise. Thirty-six university-aged listeners served as subjects. The CV exemplars were presented randomly, 20 times each, for a total presentation of 420 stimuli for each subject. The stimuli were presented to the subject at a signal level of 55 dB HL through a B-70A BC transducer worn at the forehead position. Each subject was requested to write down the consonants as they heard them. Three conditions were utilised. In condition 1, CV exemplars were presented through air conduction (earphones) in order to assess the quality of the testing apparatus, including the CV exemplars, and to provide a reference for comparison to BC. In condition 2, these exemplars were presented through the BC transducer. Condition 3 involved two separate listening tasks in which CV exemplars were presented through the BC transducer and band-limited white noise was presented binaurally, correlated and uncorrelated, through earphones. The results indicated that speech discrimination with BC was excellent and equal to air-conduction consonant identification. The confusion matrices showed higher speech discrimination scores in the uncorrelated noise condition, revealing a binaural advantage for BC hearing. Distinctive feature identification was also greater for the uncorrelated noise condition.